Legal Marketing Association seminar: They buy what you sell
If you offer consulting services, you value corporate clients who might provide a stable and long-term source of work. Naturally, the panel that featured general counsel at the Legal Marketing Association annual conference was well attended. It was also informative, as the panelists gave this message: Everything is changing, with one exception. Relationships still matter.
A startling example of change: Panelist Joe Otterstetter, managing counsel at 3M Company, said he gets most of his news about the legal industry from Twitter. Here are more observations from the panel:
Learn the language of the accountants
Increasingly, every vendor in the corporate world will run the gauntlet of procurement, the number-crunchers to whom you must justify every charge. Don’t take offense. Even inside-counsel offices are being made to present their budgets to ensure they fit into the overall financial picture. Panelist Darragh J. Davis, vice president, general counsel and corporate secretary at Petco, also gave this advice: As part of the process of writing a Request for Proposal, research the corporation’s ownership structure and map your approach accordingly. Publicly owned businesses might have different approaches than those controlled by private equity. For instance, a privately held firm could have a centralized procurement department do the buying for several enterprises even though they have dissimilar needs.
Corporations are looking for alternatives to billable hours. They want their in-house team to maintain its budget and estimate how much a project will cost, as opposed to creating open-ended agreements. This arrangement could also benefit the outside counsel, who is more likely to be accepted as a member of the team as everyone works together to seek the most efficient solutions. The consulting attorneys, however, are responsible for proposing the creative alternative, whether it is a flat monthly fee, fixed fees based on each project, success bonuses, contingent fees or a combination.
The corporate representatives call it “convergence.” Law firms call it increasing competition. Otterstetter said that three years ago, two thirds of 3M’s legal work was outsourced to 167 firms. Today, two-thirds is handled by company attorneys and 3M works with just 39 outside law firms. The company is now hiring inside lawyers with broader experience who can handle more of the sophisticated specialties. The takeaway is that 3M will continue to hire outside counsel, but the pressure is mounting to differentiate and emphasize the niches in which corporations will have less experience.
In addition, the panelists emphasized that they seek partner firms that understand and reflect their corporation’s core values. A Manhattan address is less important than it once was, and demonstrating a commitment to pro bono work and diversity is being emphasized more often. Davis, of Petco, said she references the National Association of Minority and Women Owned Law Firms as part of her decision process. Firms that are willing to offer an on-site seminar for clients on a new or important legal issue are appreciated, as are those who will spend a day at the corporation, at no charge, to learn more about its needs and outlook.
As Davis and Otterstetter put it, time and attention remain important keys to winning their business.